Advice for Hyundai's Next CMO: It's not a 'Model' Job

Hyundai has been an anomaly in US automotive market, a market that is generally driven by inertia. Over long periods of time, very little changes in the sales rankings. Very rarely does a brand gain or lose significant share. And that's because few automotive brands deviate from the tried and true automotive marketing playbook, where new model launches rule. Launches that generally drive unsustainable sales momentum as competitors answer with their new versions of facing models.

But from 2008 to 2011, Hyundai's US market share rose from 3.0 to 5.1, catapulting them to the number 6th ranked brand in the industry. But since 2011, their momentum has stalled, and their share has slipped well below 5%. And as is usually the fate of CMO's with sliding share, last month Hyundai's VP of Marketing abruptly departed. 

Most industry publications tend to blame the sales slide on a failed launch of the latest Sonata. But is that the problem? Or is the problem really that Hyundai has slipped back into playing by conventional marketing rules that rely solely on new product launches?

Looking back over the history of Hyundai, might help to answer this question, and give the new CMO some ideas for a turnaround.

When first launched in 1986, Hyundai quickly captured share from higher priced Japanese brands by promising remarkably cheaper 'Cars that Make Sense'. Hyundai sales topped out at over 263,000 units in 1987. But as buyers realized  that 'sense' did not equal quality, Hyundai's sales fell dramatically. In 1998, sales dipped below 100,000 units, and the Hyundai brand was better known as a Letterman punchline than a viable choice.

And that's when Hyundai ditched the playbook, and began to break automotive convention, by thinking brand first, and model second. 

In 1998 Hyundai launched the  'Hyundai Advantage' warranty program, with a ground breaking 10 year, 100,000 mile power train warranty--better than even any luxury brand offered at the time. That was the first step in which Hyundai, the brand, began to behave and be seen as a champion that any car buyer, buying any Hyundai model, could rely on. And in that role, they also dramatically improved every aspect of every product that they sold.

And, indeed the market was ready for such a champion. By 2001, Hyundai had doubled its market share from 1 to 2 %. By 2008, Hyundai had gained another point of market share.

And, at a time when more and more recession spooked customers stayed away from automotive showrooms, Hyundai again demonstrated that they were champions for all car buyers by launching the 'Hyundai Assurance' plan on the Super Bowl. This plan allowed new Hyundai buyers who subsequently lost their jobs to return their cars with no consequence.  Again, Hyundai struck a cord with customers and share continued to rise, even after the Great Recession was over.

So by 2012, it appeared that Hyundai, with sales exceeding 600,000 units, could indeed challenge Nissan and Honda and move into the number 5 spot in the industry. And that's when, riding on its success, and reflecting its spirit of recent innovations, Hyundai changed its tagline to 'New Thinking, New Possibilities'. But it was also at this time that Hyundai began to think and behave more like a conventional car brand, and share began to erode.

So what should the next CMO of Hyundai do stop the slide and regain momentum? 

1. Stop focusing solely on new model launches. Hyundai's portfolio range spans perhaps the widest territory in the market, from the entry level Accent to the $61,500 Equus. Focusing on individual model launches will leave no buyer with a clear image of what Hyundai stands for. 
2. Behave your brand slogan by injecting new thinking and possibilities into the market. Tap into your DNA as a champion for all buyers to pioneer new marketing initiatives that eliminate the biggest pain points in the car buying process. How about working with your dealer body to offer a 20 minute transaction time guarantee? How about developing a viable on line purchase procedure?
3. Develop new ways for customers to experience your entire brand, perhaps developing a combination purchase/car sharing model that allows owners to trade out their vehicles for other Hyundai offerings for a number of times during the year.
4. Keep Hyundai buyers in the family with cutting edge loyalty programs that reward repeat buyers with value added perks and re-purchase discounts, like the airline industry does.
5. Utilize all of the above to inform a new kind of brand led marketing message, to highlights the unique virtues of Hyundai that come with the purchase of any model.

For it will be innovative, brand led initiatives like this that will drive sustainable market share growth and brand preference in every segment for Hyundai in the future.